Gateway at Wynwood Office Buildings Facing $102M Foreclosure Suit
By Julia Echikson March 21, 2024 6:40 pm
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Could the office malaise be coming to Miami? The Gateway at Wynwood, a new Miami office building that welcomed migrating tech and finance firms, is facing foreclosure.
Wilmington Trust, acting on behalf of a commercial mortgage-backed security (CMBS) trust, is suing the owner, R&B Realty Group, in Miami-Dade Court to recoup $101.7 million and seize the 14-story office property.
Just over a year ago, A10 Capital provided $113 million to refinance the 418,337-square-foot building, which features 195,000 square feet of office space, about 25,000 square feet of retail, and 512 parking spots. The A10 Capital loan was later collateralized into a CMBS deal.
The New York-based R&B Realty completed the complex in 2021, touting its Wynwood location to new-to-market tenants arriving in South Florida in the wake of the COVID pandemic. The company had bought the 1.1-acre site at 2916 N Miami Avenue for $11.5 million in 2016 and landed a $76 million construction loan from 3650 REIT in 2020, before the pandemic hit.
Now, Wilmington Trust is alleging R&B Realty Group stopped making payments on the newest loan in December 2023.
The lawsuit also goes after a 5,187-square-foot retail building across the street from The Gateway at Wynwood that’s leased to Chase Bank. R&B Realty Group, which is owned and run by the Rosenberg family, purchased the single-story property for $7.4 million in 2015, according to property records.
A representative for R&B Realty Group did not immediately respond to a request for comment.
The Gateway at Wynwood made headlines for attracting high-profile tech tenants such as OpenStore, founded by tech entrepreneur Keith Rabois. Private equity firm Thoma Bravo, brokerage Marcus & Millichap, biopharmaceutical company Veru, and coworking provider Mindspace later joined.
At the time A10 Capital originated the loan, the property was 66 percent leased, according to a report by Morningstar.
The foreclosure suit against Gateway at Wynwood may be a sign of Miami’s softening office market. The pandemic heydey — when a slew of new-to-market tenants decamped to the Magic City and 830 Brickell broke records for nabbing rents above $100 a square foot — appears to be over.
Just this month, The Wall Street Journal reported that Related Companies and Swire Properties had amended their agreement to build a 80-story office tower in Brickell after failing to secure an anchor tenant.
Julia Echikson can be reached at jechikson@commercialobserver.com.
